On March 23 Pegatron (TPE: 4938) reported its yearly earnings which were double-digit gains over last year.

Pegatron, which shared responsibility for assembling the iPhone 6 with Hon Hai Precision Industry (TPE:2317), reported a 53.4% jump in profit year-over-year to $466.8 million. An earnings guidance recently released by Hon Hai shows that the company also expects a double-digit profit increase (it will report its earnings when the market closes on March 30).

But both Pegatron and Hon Hai (the parent company of Foxconn) — which compete in some sense — have an underlying problem: the double-digit growth that they have become accustomed to is based on the success of Apple (NASDAQ: APPL) products. Both companies have other lucrative contracts with other vendors, but no other vendor orders the sheer volume that Apple does.

Pegatron’s CEO acknowledges this. When Pegatron reported its earnings earlier this week it acknowledged that nearly 60% of its revenue came from Apple.

“It’s definitely not a good thing to be too concentrated on just a few clients. But you can’t avoid the fact that mobile phones have been fast sellers,” Chief Executive Jason Cheng is quoted as saying. “When good business comes your way, how can you not take it?”

Lessons from Hon Hai

Hon Hai was in a similar situation until last year, and has taken some steps to reduce its dependence on Apple. In 2012, 40% of Hon Hai’s revenue came from Apple as it had the sole responsibility to manufacture the iPhone 5 and the iPhone 5s.

Since then Hon Hai has acquired controlling shares in Taiwan’s Asia Pacific Telecom (TPE: 3682) and has made plays to expand into automotive. In late December it had publicly announced it had taken a 10.5% in China Harmony (HKG:3836), a major luxury car dealer in China. Recently it announced that it was partnering with Tencent (HKG:0700) to build electric vehicles that were connected to the Internet of Things. It says it can build electric vehicles for under $15,000 — a significant discount when compared to current models from major manufacturers.

Hon Hai hasn’t publicly stated how much of its overall revenue Apple accounted for, but it’s believed to be in the 25-30% range.

What can Pegatron do?

Hon Hai’s plans to diversify into electric vehicles is very ambitious, and comes at exactly the right time. Choked by smog, China is incentivizing the research and development and production of electric vehicles. Hon Hai already has considerable manufacturing infrastructure in China’s Guangdong province and in Taiwan, and the governments of both countries would be happy to provide subsidies to incentivize scaling up production and creating a supply chain.

But Pegatron lacks the scale of Hon Hai and cannot as easily scale and shift its manufacturing capacity. Instead, Pegatron should adopt just one of Hon Hai’s strategies and invest in allied firms in the same industry. Pegatron could make investments into mobile telecoms, and even finance companies: these are two things that would assist it in becoming a major IoT player. There are also dozens of wearables firms in Taiwan that Pegatron could take a stake in.

Apple will always make up a considerable amount of Hon Hai’s and Pegatron’s revenue. But both companies can become less dependent on Apple through a few smart investments.

The post How Can Taiwan Manufacturers Reduce Their Dependence on Apple? appeared first on VR World.

Hello, how are you?

Yes, it is me, the guy who decided to get out of all the CPU or GPU tests and reviews almost a decade ago. And do I feel regret? Can’t I wait to jump right back into it like Michael Schumacher, God bless him, when he returned to F1 with rather mixed results? Trust me, and please believe me I don’t mean to offend anyone, but the days of motherboard reviews and sleepless nights spent trying and testing the latest and greatest PC components are gone for good.

Funny as it is, time has not stood still in the last eight years, since I finally turned my back on Tom’s Hardware, oh yes, with money in my pocket, yet that wasn’t and couldn’t have been the reason why I was oh-so tired of it all. True enough, there are still those who care about a new chipset, new motherboards, new graphics cards, even overclocking, but the numbers have dwindled and why? Because the PC is dying, along with it the notebook, go figure!

We are running out of excuses for building or buying a new PC system, a new motherboard, a juicier power supply and even a new graphics card. What is so power hungry that would justify the pain, the expense and the time spent on such a project? The latest computer game? Yes, for years that was the one last stand for the power users, but let’s be honest, how many really good games have been released in recent years? Do we really want to sink tons of money into the hottest new components, just to be bored to tears by yet another first person shooter with yet even greater graphics, but a thin or even idiotic story, or a totally dissatisfying end?

So what are we looking at today? Oh yes, there would be this company named Apple. It came out with the greatest gift to man, the first ever true smart phone. Boy did that revolutionise the world, hasn’t it? Today, years later, we are at the nth reiteration of the iPhone, we acknowledge the iPad, we look at all the Android devices, but do we still feel the excitement we experienced when 3dfx, long gone but not forgotten, released Voodoo2? Do you remember that time? Oh how pathetic it looks today, but weren’t we blown away back then? Are we shaking in excitement the same way over the iWatch, or Nvidia’s latest addition to the world or 3D-graphics? Not really, right?

Much has happened in my life in the last eight years. Today, I am the husband to a beautiful wife and the father of an amazing 6-month old boy. Family life has got me in its grip, and I would not want to have it any other way.  You know what upsets my little son the most? It’s mommy or daddy reaching for and staring into their smartphone, instead of giving him the attention he wants as well as deserves. Oh yes, I am a smartphone addict like the next man, but little Ciarán’s disdain for this device made me realise that this cannot possibly the future of mankind.

It makes us antisocial assholes – thank you so much Apple – and if we should believe that our future might go along the lines of the Terminator movies, then becoming antisocial would have to be the first step of humanity losing what it takes to differentiate itself from and be better than ‘the machines’. I am not gonna be a daddy who hands his child an iPad once he turns one and a half years old. I made that oath, and believe me, I am still as technology savvy and hungry as you remember me, but not at any price!

People asked me to talk about how the PC and other technology business evolved to what we are looking at today, but I better be careful, feeling a little bit of an outsider who hasn’t been invited to the hush-hush back rooms, the trade shows or intimate dinners with vendors for a long time. What I can see is Samsung going to produce everything, and the kitchen sink soon, focusing along with other Asian producers on creating yet the best copy of something invented by somebody else. I see Intel apparently busy digging its own grave, Microsoft also somewhat out of wits, the Taiwanese producers, Asus et al., concentrating on squeezing the last little bit of margin, so they can continue selling their stuff just that little bit cheaper once again, and Apple predominantly concentrating on making money, rather than creating something the world is really waiting for.

My dear friend Anthony, fellow dedicated daddy as well as technology editor, suggested I should write about VR and I would love to. When it comes to gaming, it seems to be the next big thing. However, I haven’t played with it yet, so who am I to comment? I’ll get my hands on one of those funky devices as soon as possible though, and I can’t wait sharing Anthony’s genuine excitement about this technology, … or not.

I have the request to give my view of what things will be like in 2030, and what to tell your child now in preparation for our glorious future. I used to be asked that kind of question a lot in bygone times, and my answer was always the same – I ain’t no oracle! I was just about to go there and embarrass myself, but the word count of my article made me reconsider, so why not wrap things up by speaking about the current state of computer journalism? Has it evolved, improved, withered? Well the landscape has changed, hasn’t it?

It feels very much as if all the good guys are gone, while the bad ones still remain. It has become more and more popular rewording press releases rather than doing research, hard work and arriving at one’s own point of view. I wish I could say why. If you allow me taking a wild guess, I would say it has plenty to do with balls versus greed. If it is money that you are after in this business, you cannot possibly say you’re searching for ‘the truth’ or ‘justice’ or – modestly – ‘the best interest of your reader’, can you? What it takes is drive, ambition, a certain level of fearlessness and inspiration. You have that and the money will come by itself. Just watch it arrive, nod if you have to and continue with your mission.

I have joined a team of people with ambition, balls and the determination to provide quality. I would not be writing this, would I not firmly believe in it. I never wanted to return to publishing, because it is a rather ugly business. However, things are going to change, and I have my own little idea how the publishing of old will be turned into something brand new and very exciting.

I have enjoyed writing this, certainly not exactly ground breaking or overly meaningful little piece and I can’t wait getting back into the scene and mixing things up my way. Give me a chance to assimilate all that I might have missed before I can give any kind of fundamental guidance. I’ll be there.

Tom’s back, for better or worse.

The post Thomas Pabst: Is the Computing Business Getting Boring? appeared first on VR World.

USB has always been a universal standard, but it also has always had its competition, chiefly from Apple (NASDAQ: APPL) with its Lightning protocol for mobile devices and Thunderbolt for desktop. But with USB Type-C, things will be a little different.

At Apple’s recent unveiling of its new 12-inch Retina Macbook Air, many noticed the notebook’s ports — or lack thereof. The new Macbook Air ships with only one port: USB Type-C. Apple decided just to include this version of USB, nothing else, with the notebook. The USB port will handle charging, data transfers, and display output.

This strong endorsement of support from Apple is likely the beginning of the end of USB Type-C’s competition.

Apple once pitched Thunderbolt to the PC ecosystem, which was co-developed with Intel (NASDAQ: INTC), as everything USB Type-C is going to be. While many vendors ended up including Thunderbolt on their motherboards, the hardware wins just didn’t add up. When it came down to licensing royalties, cost-comparison issues just meant that Thunderbolt wasn’t as competitive. It had a place with those who needed a connector to do high-end video and graphics work, but the mainstream market wasn’t just that enthusiastic about it.

Support from everyone

The remarkable thing about USB Type-C is the broad support it is getting from both Apple and vendors in the PC space. Though the USB 3.1 protocol, which is the standard behind USB-C, isn’t expected to be fully phased in to later this year, support is rising fast from vendors. MSI (TPE: 2377) launched a USB 3.1 compliant motherboard, the Z97A, in early March and SanDisk launched the first flash drive with support around the same time.

This is only going to grow. Dozens of companies have already stated publicly their support for the protocol, and many more will be in the coming weeks.

How big will USB Type-C grow? Only time will tell. Will its growth come at the expense of Apple-centric connectivity ports? Definitely.

The post Apple’s Support For USB Type-C Shows it’s the Future of Connectivity appeared first on VR World.

In order to gain a foothold in the mobile payment market, Samsung (KRX: 005930) says that it will be waiving fees for its Samsung Pay service for credit card companies in Korea and likely the United States.

Samsung does not charge merchants that have a compatible terminal fees, but rather the credit card companies that it partners with. Reports say that Samsung was planning to charge credit card companies a 0.0015% fee per transaction.

Samsung Pay — which Samsung hopes will be offered as widely as Apple’s (NASDAQ: APPL) rival — is set to launch in the summer. Sources that spoke with Business Korea said that the company is “unlikely” to charge US credit card companies fees considering its decision for the Korean market.

Samsung’s payment platform is seen as more advanced than Apple’s. Samsung Pay supports NFC, magnetic secure transmission (MST), and barcodes for mobile payments, while Apple’s platform only supports NFC.

However both Samsung and Apple might have an uphill battle in getting consumers to use their mobile payment platforms. While Apple Pay is accepted at nearly 700,000 retail locations in the United States a survey by consultancy group Trustev shows that only 21% of users with compatible Apple devices have tried the service. From that only 2.1% of all respondents have used the service 10 times or more in a week. A whopping 79% of respondents haven’t used it at all.

For Samsung and Apple’s payment processors to take off, they need to show that there’s some benefit to their apps — as credit card companies or PayPal are free to make their own NFC or MST based contact pay apps. Both Samsung and Apple need to figure out how to make their apps more convenient for users if they want them to succeed.

The post Samsung Pay Going Free to Take on Apple Pay appeared first on VR World.